Mousekeeping adds to Euro Disney loss

Mousekeeping adds to Euro Disney loss

Wednesday 10 November 2004 02.41 EST
First published on Wednesday 10 November 2004 02.41 EST

French theme park operator Euro Disney saw its losses increase last year due to royalty payments, the costs of its financial restructuring and the failure to attract more visitors.

Two months after the company announced a massive debt restructuring deal to keep it afloat, Euro Disney posted a net loss of €145m (£101m) for the year to September 30, compared with a loss of €56m the previous year. Revenue was virtually unchanged at €1.05bn.

Euro Disney blamed the figures on a tough environment for the travel sector. "The company's annual results reflect flat visitor numbers and turnover in another difficult year for the European travel and tourism industry," chairman Andre Lacroix said. The terrorist attacks on the US in 2001 had plunged the whole sector into crisis, which lasted well into this year. Some 12.4 million people visited the Disneyland Resort Paris and Walt Disney Studios parks outside the French capital in the year - the same as the previous 12 months. Occupancy rates at the hotels the company leases around the Disneyland Paris site dropped 4.6% to 80.5%.

The company also saw an increase in costs, partly because it had to resume royalty payments to its 39% shareholder Walt Disney for the use of the Mickey Mouse characters, which totalled €58m. It had previously negotiated a waiver of these fees because of its financial problems. Euro Disney paid €12.6m in fees linked to its financial restructuring, and €9.2m for scrapping its "Visionarium" ride that will be replaced by another in 2006.

Net debt stood at €2.05bn. As part of the debt restructuring, Euro Disney needs to raise €250m in a rights issue it hopes to carry out next January if market conditions permit. The move will be put to shareholders for approval on December 17.

"Four years would be the range in which we would start to see the full benefits of the re structuring and its impact on our income statement," said finance director Jeff Speed. "It is not going to be overnight that we see a return to profitability. It is going to take some time to see the full impact of the restructuring."